Legal position on family equity dispute

[saffie]

9 years ago I entered a verbal contract with my sister to enable her to buy a house by agreeing to put my wife as a joint owner in order that my sister would be able to get a mortgage. Our verbal agreement was that she had 5 years in which to improve her financial position in order to buy me out of the mortgage and for her to take over the mortgage in her own right. After 6 years my sister married a man with debt issues and who then took a job on a contract basis meaning he will never be offered a mortgage. I want to be released from having my wife's name on this mortgage and release my equity in the property. I believe my sister and her husband should now be responsible for their own finances.Our initial investment as a downpayment on the property was 50% each with the other 100k on a joint mortgage. I do not pay towards the mortgage payments however, neither have I taken any rent for my share of the property whilst my sister has been living there. My sister and her husband refuse to allow me to sell the property and release my own equity nor will they take on the mortgage in their own joint names. WHat is my position and how much equity am I reasonably entitled to claim? My sister is claiming she has been advised she is now entitled to 82% of the equity whilst I am only entitled to 18% since I do not contribute towards the mortgage payments. Either way,I want my wife's name off this mortgage and do not want to be held responsible in the future for any more debt my brother in law gets himself into.What is my legal position and what am I reasonably entitled to expect? I believe the property is currently valued at around £195k.

Any advice please?

[IanM]

Re: Legal position on family equity dispute

Hello Saffie. As your wife is joint owner of the property she is entitled to put the property up for sale at any time she wishes to, as for what equity you would be entitled to would be for the solicitor dealing with the sale to sort out. If there has only been 9 years of mortgage payments made I doubt very much that your sister would be entitled to 82% of the proceeds but you would need to check with a solicitor before deciding whether to put the property up for sale or not. If you do put the property up for sale and your sister is unable to obtain a mortgage to buy out your share then she may end up having to move into a rented property.

[saffie]

Re: Legal position on family equity dispute

I have offered them a cash lump sum of £10k to encourage them to put the house up for sale and give them a buffer for her husband to sort his finances out if they need to rent for a time. They have refused this and feel they are entitled to carry on living in the house with no financial commitment to me. They even reduced the agreed mortgage repayments by £150 a month to free up more monthly cash for her husband to waste. It was agreed that when her husband found a new job with increased pay,the mortgage repayments would be increased to the usual level. However I was unaware this had not been carried out after he chose to take a contrat job with an increased pay of another £10k a year so they are effectively living there and paying minimum repayments with no intention of increasing it. This has caused a major rift with my sister and my wife. We feel as though we are being held to ransom and yet bear all the responsibility for any future debt they incur nor any return for our initial investment which was made to help her out in the first instance.

[IanM]

Re: Legal position on family equity dispute

In this case I would be putting the house up for sale as soon as possible before they have the chance to have the house repossessed. Your wife needs to submit a SAR to the mortgage company to find out exactly what is owed and if there are any arrears or court action being threatened by the lender due to the reduced payments. If the house is repossessed then your wife would be liable for any shortfall between what you owe and what the house sells for if this amount is lower. Try once more to negotiate with your sister but it sounds as if 'love', or jealousy of you and your wife, is clouding her common sense and someone needs to take charge of the situation before you both lose out in the long run.

[saffie]

Re: Legal position on family equity dispute

Thank you for your response. Unfortunately my meeting this afternoon with my sister did not go well. She is now saying that we never made such an agreement and that if I love her I would see that she is in difficulties and give up all my rights to anything in the house and just let her keep it. She claims it is not her fault that her husband is so irresponsible with finance and that as her brother it is my responsibility to support her and that,by threatening to sell the property I am turfing her and her husband and daughter out on the streets. I have reiterated that I am willing to pay her a lump sum of £10k to allow them to rent a property using their current mortgage repayment costs and that would give them 3 years of buffer to get their finances in order and allow some time for her husband to improve his credit rating.She rejects this offer out of hand and claims I am being greedy and am only interested in making money! There seemed little point in arguing any more and I told her that unless they were willing to be reasonable and come to a right and proper signed agreement in which I was perfectly willing to give them a bit more time to settle their finances,then I would have no alternative than to seek legal advice. She claims that my threat to do this confirms that I have never loved and supported her and that I would put money above her and her daughters happiness and security. Until my sister married this spendthrift,we had a very close and caring relationship. I have been supporting her financially for the last 14 years and felt that now she is married it was now her husbands responsibility. They have been married 3 years now and he still does nothing to either improve the property or to improve their position. It's all very sad and upsetting.

[Inca]

Re: Legal position on family equity dispute

Aaah,,the age old 'sibling' chestnut. I come from a large family and have seen the emotional blackmail it can create.
Your sister is no longer a child,she's a grown woman and should stop acting like a pouty child.And you,my friend,have got to stop allowing her to hold you to ransom as it were (and I seriously am NOT trying to offend you in any way)
Her happiness is NOT your responsibility,it's down to her husband to keep her happy. You owe them nothing and you certainly shouldn't feel guilty for trying to protect your investment.
I'm 50 years old,,and I am extremely close to my older brother,but trust me,if it was a choice of keeping me or his wife happy,I would lose hands down.
Personally I would take legal advice as soon as possible.
Of course,,you could do reverse psychology on her,,if she cared so much about you,she wouldn't be putting you in this position would she???